Item 21 - FINANCIAL STATEMENTSIn Item 21, you can review copies of the franchisors' financial statements for past three years. Specifically, this Item lets you examine the franchisor's ability to meet its long-term debts and financial obligations.
- Identify potential investment risks by examining the franchisor's overall financial situation.
- Look for the following items to see how they change from year to year:
- How much cash do they have on hand?
- Are they increasing in business revenue from year to year?
- Do they have good spending habits?
- How much debt do they have?
- Is the debt going up or down?
- What money is owed to them?
- Are royalties and receivables going up or down?
- Are officers paying in money to the company?
- What did their expenses do in the last year?
- What did net earnings do?